The Company offers lifestyle-oriented general merchandise and consumer products and services through a portfolio of global consumer brands. The Company operates two reportable segments—“Retail” and “Wholesale.” The Company’s Retail segment consists of the “Anthropologie,” “Bhldn,” “Free People,” “Terrain” and “Urban Outfitters” brands and the Food and Beverage division. The Anthropologie, Bhldn and Terrain brands make up the “Anthropologie Group.” As of October 31, 2018, there were 248 Urban Outfitters stores, 228 Anthropologie Group stores, 134 Free People stores, 13 restaurants under the Food and Beverage division and three Urban Outfitters franchisee-owned stores. Each of Urban Outfitters, the Anthropologie Group and Free People, including their Company-owned and franchisee-owned stores and digital channels, and the restaurants operated under the Company’s Food and Beverage division, are considered an operating segment. Net sales from the Retail segment accounted for approximately 90.3% and 90.6% of total consolidated net sales for the three and nine months ended October 31, 2018, respectively. Net sales from the Retail segment accounted for approximately 90.6% of total consolidated net sales for each of the three and nine months ended October 31, 2017. The remaining net sales are derived from the Company’s Wholesale segment which consists of the Free People, Anthropologie and Urban Outfitters brands that sell through approximately 2,100 department and specialty stores worldwide, digital businesses and the Company’s Retail segment. The Wholesale segment primarily designs, develops and markets young women’s contemporary casual apparel, intimates, FP Movement activewear and shoes under the Free People brand, home goods including gifts, tabletop and textiles under the Anthropologie brand and the BDG apparel collection under the Urban Outfitters brand. The Anthropologie wholesale division was established in the third quarter of fiscal 2018 and the Urban Outfitters wholesale division was established in the third quarter of fiscal 2019.

The Company has aggregated its brands into the Retail segment based upon their shared management, customer base and economic characteristics. Reporting in this format provides management with the financial information necessary to evaluate the success of the segments and the overall business. The Company evaluates the performance of the segments based on the net sales and pre-tax income from operations (excluding intercompany charges) of the segment. Corporate expenses include expenses incurred and directed by the corporate office that are not allocated to segments. The principal identifiable assets for each reporting segment are inventory and property and equipment.

Other assets are comprised primarily of general corporate assets, which principally consist of cash and cash equivalents, marketable securities, deferred taxes and prepaid expenses, which are typically not allocated to the Company’s segments. The Company accounts for intersegment sales and transfers as if the sales and transfers were made to third parties making similar volume purchases.

The Company’s omni-channel strategy enhances its customers’ brand experience by providing a seamless approach to the customer shopping experience. All available shopping channels are fully integrated, including stores, websites, mobile applications, catalogs and customer contact centers. The Company’s investments in areas such as marketing campaigns and technology advancements are designed to generate demand for the omni-channel and not the separate store or digital channels. Store sales are primarily fulfilled from that store’s inventory, but may also be shipped from any of the Company’s fulfillment centers or from a different store location if an item is not available at the original store. We also allow customers to view in-store inventory from our websites and mobile applications. Digital orders are primarily shipped to the Company’s customers through its fulfillment centers, but may also be shipped from any store, or a combination of fulfillment centers and stores depending on the availability of a particular item. In addition, customers can pick up digital orders and return certain merchandise purchased through digital channels at retail locations. As the Company’s customers continue to shop across multiple channels, the Company has adapted its approach towards meeting this demand. Due to the availability of like product in a variety of shopping channels, the Company sources these products utilizing single stock keeping units based on the omni-channel demand rather than the demand of the separate channels. These and other technological capabilities allow the Company to better serve its customers and help it to complete a sale that otherwise may not have occurred due to out-of-stock positions. We manage and analyze our performance based on a single omni-channel rather than separate channels and believe that the omni-channel results present the most meaningful and appropriate measure of our performance.

The accounting policies of the reportable segments are the same as the policies described in Note 2, “Summary of Significant Accounting Policies,” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2018. Both the Retail and Wholesale segments are highly diversified. No one customer constitutes more than 10% of the Company’s total consolidated net sales. A summary of the information about the Company’s operations by segment is as follows:

	Three Months Ended						Nine Months Ended
	October 31,						October 31,
	2018			2017			2018			2017
Net sales
Retail operations	$	878,869		$	808,546		$	2,556,460		$	2,289,526
Wholesale operations		97,732			88,663			273,966			245,866
Intersegment elimination		(3,068	)		(4,435	)		(8,751	)		(8,497	)
Total net sales	$	973,533		$	892,774		$	2,821,675		$	2,526,895
Income from operations
Retail operations	$	88,538		$	61,667		$	246,833		$	150,575
Wholesale operations		19,150			20,866			53,770			57,373
Intersegment elimination		216			61			298			91
Total segment operating income		107,904			82,594			300,901			208,039
General corporate expenses		(11,547	)		(9,706	)		(33,796	)		(38,935	)
Total income from operations	$	96,357		$	72,888		$	267,105		$	169,104

	October 31,		January 31,		October 31,
	2018		2018		2017
Inventory
Retail operations	$	413,102	$	300,493	$	403,631
Wholesale operations		38,557		50,902		46,326
Total inventory	$	451,659	$	351,395	$	449,957
Property and equipment, net
Retail operations	$	806,452	$	811,128	$	826,296
Wholesale operations		2,431		2,640		2,810
Total property and equipment, net	$	808,883	$	813,768	$	829,106

The following tables summarize net sales and percentage of net sales from contracts with customers by merchandise category:

	Three Months Ended						Nine Months Ended
	October 31,						October 31,
	2018			2017			2018			2017
Net sales
Apparel ⁽¹⁾	$	663,995		$	615,143		$	1,954,130		$	1,734,619
Home ⁽²⁾		136,483			126,655			386,093			367,835
Accessories ⁽³⁾		124,966			108,199			342,076			298,141
Other ⁽⁴⁾		48,089			42,777			139,376			126,300
Total net sales	$	973,533		$	892,774		$	2,821,675		$	2,526,895

As a percentage of net sales
Apparel ⁽¹⁾		68	%		69	%		69	%		69	%
Home ⁽²⁾		14	%		14	%		14	%		14	%
Accessories ⁽³⁾		13	%		12	%		12	%		12	%
Other ⁽⁴⁾		5	%		5	%		5	%		5	%
Total net sales		100	%		100	%		100	%		100	%


(1) Apparel includes intimates and activewear
(2) Home includes home furnishings, electronics, gifts and decorative items
(3) Accessories includes footwear, jewelry and handbags
(4) Other includes beauty, shipping and handling revenues and the Food and Beverage division

Apparel, Home, and Accessories are sold through both the Retail and Wholesale segments. Revenue recognized from the Other category is primarily attributable to the Retail segment.

The Company has foreign operations primarily in Europe and Canada. Revenues and long-lived assets, based upon the Company’s domestic and foreign operations, are as follows:

	October 31,		January 31,		October 31,
	2018		2018		2017
Property and equipment, net
Domestic operations	$	734,622	$	720,890	$	735,731
Foreign operations		74,261		92,878		93,375
Total property and equipment, net	$	808,883	$	813,768	$	829,106

	Three Months Ended				Nine Months Ended
	October 31,				October 31,
	2018		2017		2018		2017
Net Sales
Domestic operations	$	854,347	$	779,790	$	2,467,015	$	2,222,589
Foreign operations		119,186		112,984		354,660		304,306
Total net sales	$	973,533	$	892,774	$	2,821,675	$	2,526,895